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NICK GRIMM: A short time ago, a group of West Australian gold miners launched an advertising campaign to drum up support for the sector.

It comes amid growing industry concern that a year-long review of the state's mining royalties will recommend the gold sector pay more.

From the Diggers and Dealers mining forum in Kalgoorlie, Anna Vidot reports.

ANNA VIDOT: Western Australia's goldfields have powered the Kalgoorlie region for more than 130 years, but the industry hopes a new campaign will underline how important gold mining is to the whole state.

VOICEOVER (excerpt from mining industry ad): The industry now employs more than 25,000 West Australians, so it's the second largest employer in the resources sector. Gold mining keeps us strong.

ANNA VIDOT: The gold industry says it's a positive public awareness campaign that'll run on radio, online and social media, but behind the feel-good factor is a tough edge.

Gold miners say they already pay $300 million in royalties and taxes to the State Government each year.

And they're worried they're about to get hit with higher royalties, after a long-awaited review is handed to government towards the end of the year.

But before any recommendations are made, the state budget revealed the Government's already factored in an additional $180 million from royalties in 2015-16, and in the two following years as well.

There's been wide speculation in the industry that gold may be asked to bear the brunt of that increase.

JON PRICE: It's a significant concern. There's a 2.5 per cent state gold royalty now and we know that margins are tight across the sector.

JON PRICE: Any impost that comes from an increase in royalties or other imposts coming from state and federal governments is just going to erode the tight margins that we currently have.

ANNA VIDOT: While the gold price has recovered to grow more than 8 per cent this year after crashing in 2013, Jon Price says increasing royalties would have serious consequences for the gold sector.

JON PRICE: It's going to put a lot of companies at risk. There's going to be job losses; there's going to be a general downturn because the margins are already tight.

ANNA VIDOT: The West Australian economy has always been mining focussed, and royalties underpin the state's financial health.

Twenty per cent of the state's income comes from iron ore royalties alone.

Last year, WA lost its triple-A credit rating, and the budget projects the state's debt to hit $28.5 billion by 2016-17.

But Jon Price says the 2.5 per cent rate of royalties currently being paid by the gold sector is appropriate.

JON PRICE: And those royalties often don't return to the regions from which they come, in any event. So, I would like to see the royalties stay where they are and the companies that are working and living in the regions actually continuing to promote the economies of the regional areas and so the money doesn't go into state coffers where the regions often don't see it again.

ANNA VIDOT: Western Australia's Mines and Petroleum Minister Bill Marmion says his department has consulted with industry representatives at every stage of the review process.

He says the royalty review is independent, and "specifically tasked with taking into account the financial viability of particular industries."

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